Australia’s central bank says spending on artificial intelligence infrastructure is increasing demand before broad productivity gains have arrived. Sarah Hunter described pressure on chips and construction trades, alongside the possibility of a higher neutral interest rate. Businesses’ reorganisation and expanding infrastructure could eventually ease bottlenecks, but the scale and timing of those changes remain uncertain.
Australia’s central bank is examining how the artificial intelligence investment boom could increase near-term price pressure. In Sydney, its economics chief Sarah Hunter said infrastructure spending was already increasing demand while broad productivity gains had yet to become clearly visible. She described possible economic channels whose size and timing remain uncertain.[1], [2]
The bank estimates realised data centre investment has grown tenfold from a low base over three years. Much of that spending buys imported equipment, limiting its net contribution to domestic output. Hunter identified spillovers into engineering, construction and electricity infrastructure. Semiconductor supply constraints and demand for already-stretched construction trades were contributing to price pressures.[1]
Businesses need investment and changes to their working processes to realise productivity benefits, Hunter said. Expanding data centre and supporting capacity could ease bottlenecks over time. She also discussed how global competition for savings might raise the neutral interest rate, the rate balancing demand and supply of savings. The bank is still assessing the magnitude of that possible effect.[1]
